Madoff whistleblower speaks at Framingham State

Thursday

Feb 13, 2014 at 12:01 AMFeb 13, 2014 at 11:56 AM

Kendall Hatch Daily News Staff

FRAMINGHAM – A whistleblower who spent a decade trying to convince the government that Bernie Madoff was running a Ponzi scheme said that although Madoff was eventually caught and put in jail, he would not repeat the experience if given the choice."There were no happy memories in this case," Harry Markopolos told a crowd at Framingham State University Wednesday evening. "It was as bad as it gets."Markopolos, a former executive in the securities industry and now a forensic accountant and financial fraud investigator, said he spent 10 years trying to get the Securities and Exchange Commission to realize that Madoff was a fraud – a fact he gleaned after looking at Madoff’s numbers for five minutes.Markopolos described a system of complicit bankers and incompetent governmental investigators all paving the way for Madoff to dupe countless investors into allowing him to build a $17 billion Ponzi scheme.The racket, which caused several victims to lose the entirety of their wealth and had effects on the victims beyond what was widely reported, Markopolos said."They put all their eggs in one basket – and it was Bernie Madoff’s basket," he said. "We have a quiet body count … A lot of suicides in this case."The scheme was also one that was plain as day to Markopolos and his team of four other investigators. He said that Madoff’s numbers were out of whack – too good to be true. He said that although they knew Madoff was stealing and bilking people out of money, they couldn’t get anyone in power to listen."In our story, we knew it was a fraud immediately," he said. Markopolos went to the SEC three times, which yielded nothing, and said that some media outlets didn’t believe the story when he and his fellow investigators tried to tell them about it."It was too big to be true," he said.Markopolos said that he spent most of the time he was tracking Madoff simultaneously looking over his shoulder, after he said he discovered that Madoff was bilking money from criminal enterprises. Markopolos said that he believed that if Madoff was taking risks like that, he could potentially take action against anyone he thought might out his scheme."That’s when I armed myself and checked for bombs," he said.Markopolos said that although there has been a trickling of charges filed in the wake of Madoff’s conviction – namely against a handful of his former office workers – many of the players whom he believes were complicit or turned the other way have shirked any accountability.JPMorgan, which Markopolos called Madoff’s "bagman," was fined $2 million, but that the individuals who may have had knowledge there and at other banks have gotten away scot-free, he said. Incompetent government investigators were allowed to resign instead of being fired so they could take higher paying jobs in the private sector, Markopolos said."No one has gone to jail," he said. "There was no accountability in the government whatsoever."Markopolos also said that there have been some regulatory changes in the wake of the Madoff scandal, but said that the government is still not devoting enough resources to stopping such a crime."White-collar crime destroys so many lives," he said. "It takes you to the darkest places of humanity."Kendall Hatch can be reached at 508-490-7453 or khatch@wickedlocal.com. Follow him on Twitter @Kendall_HatchMW.